Perfect Labor Storm 2.0 is a blog that highlights workforce trends, demographic shifts, and human resources changes that will change the way employers do business.

February 2008

February 29, 2008

Connecticut businesses are having a hard time hiring workers, according to a newly released survey by the Connecticut Business and Industry Association.

The CBIA said Connecticut has demographic challenges on two fronts: The population of young people in the state is declining, and the baby boomer generation is preparing to retire. Consequently, skilled workers are becoming scarce.

The biggest worker shortages are in the machining, engineering, sales and customer-service fields.

The survey also said skills most in demand are manufacturing, communication and leadership, computer and engineering skills, as well as "overall employability" skills, such as work ethic and punctuality.

For the first time in history, more than one in every 100 American adults is in jail or prison.To be exact, this is one out of every 99.1 adults, and more than any other country in the world. Even worse, 1 out of every 56 men over 18 years old is behind bars. The report was released last week by the Pew Center on the States.

The 50 states spent more than $49 billion on corrections last year, up from less than $11 billion 20 years earlier. The rate of increase for prison costs was six times greater than for higher education spending, the report said.

At a time when businesses are clamoring for skilled workers, tax dollars and community resources are being diverted to house prisoners and build more and larger facilities. In what appears to be a vicious cycle spiraling out of control, the rate of high school dropouts in many schools exceeds 30%.It is so bad in some schools that they have been labeled as “dropout factories.”Dropouts have the greatest likelihood of spending time behind bars. In effect, we build more prisons to house the ex-students who dropped out instead of addressing one of the root causes of the problem in the first place.

And in the meantime, this is just one more reason why the U.S. will experience the full effect of the Perfect Labor Storm – with not enough workers to fill all the skilled jobs, we can hardly afford to have 10% of the working population behind bars.

February 25, 2008

NRECA (National Rural Electric Cooperative Association) figures show as many as 41 percent of CEOs, more than 17 percent of engineers and operations professionals, and nearly 10 percent of lineworkers could call it a career by 2010. According to Russell Turner, NRECA principal, that equates to a shortage of as many as 10,000 linemen within the next 3 years.

February 23, 2008

Add welders to the list of nurses, teachers and other workers who could be in short supply in just a few years.

The Miami-based American Welding Society says the nation could have a shortage of 200,000 trained welders by 2010. The society has raised about a quarter of the $10 million it wants for its welder work force development campaign.

66.2 percent said it will be either “hard” or “much harder” to find skilled workers in the future.

More than three of every 10 business respondents said they thought the quality of Tennessee’s work force had declined in the past decade.

The crisis reaches a climax soon because most employers said having more skilled workers increasingly is important for their business success.

You’ve heard the same story over and over, “The skill requirements for jobs are ever-increasing at the same time that much of our labor force is about to retire. The number of workers coming into the labor market isn’t going to grow as fast in the future.” (Dr. Matt Murray, a University of Tennessee economist.)

Like nearly every other state (and developed country as well), a 2008 Economic Report to the (Tennessee) Governor spells out that “If Tennessee cannot produce the skilled work force required by businesses that compete in the global marketplace, these jobs will go elsewhere, to the detriment of the state and its residents.”

To get employees ready to work, the average Tennessee employer spends $4,152 per year on worker training, according to the employer survey.

Bob Sentell, human resources manager for Alstom Power, said his company is having to replace many of its older welders and other skilled tradesmen. At the same time, Alstom is preparing to hire 350 new workers for a new turbine division.

February 13, 2008

Small accounting firms and companies are beginning to feel The Perfect Labor Storm beating down on their businesses. There is an acute shortage of accountants in a fast-growing industry. The demand for employees is far outstripping the demand. There are many reasons for the shortages which can be found at Finance & Commerce but none so succinctly stated as:

“I’m old school – I’m in my mid-50s – and when we left school firms expected 60-hour weeks and a lot of loyalty. This generation won’t accept that. They stay connected with their friends at other companies, and they’ll move if they don’t think they’re being treated well.”

The "attitudes" of younger workers is one of the most common comments (complaints?) that I hear DAILY from clients and prospects. As I tell them, qualified workers are in a "buyer's market." They have what you want and if you don't like it, you (as a manager or business owner) will have to figure out another strategy if you want to attract, hire and retain accountants going forward.

In addition to staff accountants, CFOs are in high demand. One of the more significant trends regarding CFO is that salaries are going up and up and up.... For qualified CFOs, the numbers do add up big for them. One strategy I've seen taking place is that many smaller organizations are replacing CFO with Controller or Director of Finance. It's the same job, different title hoping to be able to pay less. In many cases, I suspect that's a good move - the title CFO was likely handed out as an ego-boost or as part of a re-organization. In reality they organization was employing a staff accountant in a CFO's suit. In other cases, the CFO title may have been justified. My advice - be careful in this high-tech world with giving and taking away titles to play with compensation. You'll get what you pay for!

February 12, 2008

Here's another storm brewing that will add to the shortage of skilled workers. (Remember, the Perfect Labor Storm isn't about a shortage of workers but a shortage of skilled and qualified workers.)

In a column posted on mywesttexas.com the challenge that workers are finding child care is increasing....and troubling. The story attributes the shortage to three things -- lack of staffing, an influx of families moving into the area and more births. The lack of staffing (or at least finding qualified and dependable workers) is universal. To attract a higher quality worker, child care centers are increasing wages. This only increases the fees families must pay for the care. For many families including single parents, the costs are outstripping their wages. This is not good for businesses. Child care is likely to become a high demand benefit now that Gen Y - the largest generation ever - is entering the workforce. Many of these young people are minorities, reportedly as high as 70 percent. Minorities, especially the Hispanic and Latino population, have higher birth rates than the Caucasians and African-Americans. Minorities have tended to have lower wages too making it more difficult for the skilled but lower paid employee to afford to work if they have children.

One factor not mentioned in the article was that for the Baby Boomer's children, grandparents and relatives were often the child's care during the workdays. That was at a time when families were geographically close...and older workers retired. Today, we're seeing families dispersed so parents are not always close by. And many of the boomers are still working or traveling. That leaves parents with children holding the ...diapers?...when it comes to finding child care.

February 11, 2008

Employers tend to think that only about 20 percent of employees at other companies are "available" to recruit. But Monster says the truth is nearly the opposite. Finding Keepers breaks out three types of candidates:

Settled loyalists (about 30% of workers) are happy where they are and hard to displace.

Poised Loyalists (about 11% of workers) are happy but could be enticed to move.

Poised Opportunists (about 59% of workers) are actively looking. They've posted their resumes, will apply for your job, and are amenable to job offers.